Last December we reported, as you may remember, the criminal misdeeds of Dan Harkey, the funder-husband of Assemblywoman/BOE favorite Diane Harkey – how Dan was found guilty of defrauding a whole bunch of senior investors in a Bernie Madoff-like ponzi scheme and ordered to pay them back $11 million, and how instead the multi-millionaire declared bankruptcy and has refused to pay his victims a cent, as many of them continue to live in poverty, subsisting on their social security checks or families. At the time our favorite commenter David Zenger responded:

“I guess you can’t get any lower.”

Well, for once, Zenger was wrong! Mr. Harkey DID find a way to get even lower. For now it’s come to our attention that he’s begun filing suit against his own victims – for $50 million each, individually, one at a time in different courts – on the grounds of something called “malicious prosecution.”

“Huh???” is about right.

This is a pattern of behavior we’ve seen before with Mr. Harkey – filing multiple separate suits against different victims in different courts at slightly different times, to intimidate them and keep them off balance. He did this a few years ago in order to coerce some of these folks to participate in some investment schemes they didn’t want to. That plan failed…but how was it even possible to abuse the legal system that way?

Our friend Kurt Sipolski, a polio victim in Palm Desert and author of a well-received memoir about his mother, “Too Early For Flowers,” alerted us to this new outrage this week. Kurt, who was left impoverished by Harkey and is living on $600 a month Social Security, was awakened Monday by “a very pretty lady in stiletto heels.” No, she did not come with the $150,000 which should be Kurt’s share of the $11 million court-ordered award, but a 500-page lawsuit demanding $50 million from Kurt for his temerity in having beaten Harkey in court.

Now these victims/plaintiffs/defendants are waiting to see how many shoes drop – so far Harkey has sued about half a dozen of them. Jeff Gomberg, out in Tennessee, received HIS suit a few weeks ago. Jeff’s was a little different from the others, as “defamation” was included in the charges against him. Younger than most of the original plaintiff/defendants, Jeff had originally gotten involved in the case against Harkey when his elderly parents died waiting for the million or so that they were owed by the swindler.

How fair is it to associate Dan Harkey’s incredible, nearly comically predatory sociopathic behavior with his politician wife Diane, who is currently all but guaranteed victory in her race for Board of Equalization this November? All kinds of fair.

Diane began her career coming out of nowhere onto the Dana Point City Council in the late 90’s, funded by her husband’s ill-gotten gains.

Diane’s 700 forms have consistently shown $200,000 income from her husband’s Point Center investment firm, during a time when no other investors were receiving income.

Records show a pattern of Dan transferring money from his company into his personal account, and thence into Diane’s campaign coffers, including a $100,000 campaign debt.

Diane has never foregone a moment of luxury living off her husband’s swindled profit at Dana Point’s Ritz Cove (above right) while masquerading as a champion of the poor put-upon taxpayer.

It’s hard to imagine Diane Harkey, the Republican candidate against some unknown Democrat in such a heavily Republican district as the one including Orange and San Diego Counties and the Inland Empire, not prevailing and holding this powerful taxpayer-funded job for eight years; just as it is hard not to imagine the nausea, despair and nihilism that will follow that outcome. Diane and her husband have successfully insulated her legally from all the unpunished swindles that started her career and keep her ticking. But still, just in the spirit of putting up a bit of a fight, here is the website of her opponent, a “Nader Shahatit.”

Oh, great. It is “currently under construction.” Just brilliant. Aren’t Democrats wondrous?

30 Comments

The worst part of this whole Harkey thing (from the perspective of a non-victim) is the silence regarding this woman and her political career – built on the backs of investment dupes – from all the courageous stalwarts in the GOP. But of course these were the same crowd who backed Mike Carona, too, right up to when the shithammer fell.

David, you are right, but even worse is that Harkey continues offering 10% return under a different co. name CAL COMM since Point Center Financial is bankrupt….
And Calif. BOE tax payers brace yourself, Diane Harkey will be collecting…..

“Oh, great. It is “currently under construction.” Just brilliant. Aren’t Democrats great?”

One of my major themes on this blog has been: “Be right, not liked”.

This is a virtue held high here, unfortunately it is entirely ignored, if in disagreement with some people… Another example would be the lack of qualified candidates to replace mayor Pulido, or Larry Agran.

Thanks so much for this. You are the only journalist in California so far who has dared cover this reprehensible couple. Harkey must eat money by the handfulls, never concerned about the thousands of people he has forever damaged by his American Greed. I have forwarded your excellent article from the governor to both political parties and every tv station and newspaper in CA. You are to be commended for your hard, exhaustive and investigative work.

again, your one sidedness is anything but subtle. sure, maybe a few people have lost a couple of bucks, but lets look at the big picture. think of the money that has flowed to lawyers, accountants, financial service people, political consultants who then redistribute those funds to media people, printers, support staff and the like. and remember, those people eat at restaurants, shop at the stores and purchase gas at the places where the people you champion work. therefore, if you look at it objectively, the harkeys are generating jobs and redistributing wealth…you should be much more supportive

And wow this Nader is exciting: “The assemblywoman is favored to win the Board of Equalization’s 4th District in November. Her campaign spent $622,000 in the six-person primary and she finished first. She’ll face off against Democrat Nader Shahatit, an auditor with the tax board. Shahatit said he plans minimal fundraising and has declined to criticize Harkey, saying he is running a positive campaign.”

I see that she has gone through the motions of pretend half-divorce and pretend separation to try to keep herself clean here, but nobody’s falling for it. Oh and I forgot to mention in my article, that once again we have our DA Tony Rackauckas to thank for … absolutely NOTHING in the realm of justice.

I love “Aires said the investors he represents will pursue Harkey’s tax board wages if she wins in November.” And really, how does she not win against this Shahatit? Watching this lady getting inevitably returned to major office … I promise I will try to laugh instead of cry. Hey, our taxpayer money will end up paying nice people like Sipolski and Gomberg anyway!

I think that this is a polite way of his saying “I don’t have any money, folks; I’m just giving you an option to vote against her.”

Fair enough — but the public should know what Harkey is — and what she is doing, and why she belongs nowhere near a body like the BOE.

I hate to say this, but it may be time to set up a committee for independent expenditures in the race (with all of our copious spare time.) Telling the public a true story that they otherwise won’t hear is an IE’s highest purpose.

Mr. Nelson: Thank you for the factual article. It is very disturbing that the FBI and/or USDOJ does not understand that Ponzi schemes, even in the affluent Orange County, California, lives of hard-working citizens. Based on the $11 million judgment entered against Dan Harkey’s corporation, one would think the feds would get involved. One can only wonder how 2 people can be involved in so many civil lawsuits and never labeled vexatious litigants.

Or, is there a possibility that the Harkeys have knowledge of a for-profit strategy that includes the filing and defending of civil lawsuits, with intent to get judgments paid via Homeowner insurance policies? As a non-attorney, it is my understanding that Harkey cannot turn the $11 million civil judgment over to his homeowners’ liability insurance because it was based on fraud, not usually covered by homeowners insurance.

My wages were garnished by the Foothill Eastern Transportation Agency based on a fraudulent judgment entered against my husband in March 2005–my wages were garnished in July 2011. I was not named as a defendant and any amounts allegedly owed to the TCA were paid in January 2004–all arising out of a change of debit card miscommunication. Without legal service, a default judgment totaling $27,000 plus was entered against us. I am still waiting to receive a response to my letter to DA Rackauckas regarding the return of the $20,000.00 plus that was withheld from my wages.

I do not know who the investors involved with The Toll Roads fiasco are; however, one of Diane Harkey’s Dana Point colleagues, Lisa Bartlett (Chair of Foothill Eastern Transportation) and TCA CEO Neil Peterson, were caught signing unauthorized checks on behalf of the TCA earlier this year. CEO Peterson was forced to resign with a double dipper pension….. Bartlett was never held accountable and is now a finalist for a seat on the OC Board of Supervisors.

At what point will OC clean up the injustice committed against residents?

Thanks for the kind words, Ms Bodkin, and the interesting information, and I hope you get your money back, but I can’t help but ask:
Who would bear the Whips and Scorns of time,
The Oppressor’s wrong, the proud man’s Contumely,
The pangs of despised Love, the Law’s delay,
The insolence of Office, and the Spurns
That patient merit of the unworthy takes,
When he himself might his Quietus make
With a bare Bodkin?

Just to put things into perspective, over 2,000 individuals were apparently caught up in the Harkey fee scam including many seemingly unqualified borrowers who received these toxic investment loans. At least 17 portfolio loans worth ~$325 million imploded because Harkey underfunded them. Then he pocketed the origination fees as if the loans had been fully funded. When the loans failed, as underfunded loans are known to do, investors ate the losses (100% losses in many cases).

Interesting thing about the fees. They were paid 100% from investor capital funds. Borrowers never paid a dime. My personal opinion is that between predatory lending, predatory loan servicing practices, and investor sleights of hand, this was a disaster long in the making.

Many investors still think Harkey is a “nice” man. Most con men are. They still believe the “global economic meltdown” spin that Harkey & associates fed investors, and that attorney Jeff Benice tried to feed the courts. Fortunately the jury saw through the smokescreens and mirrors, returned their judgements, and awarded $12.5 million to the “handful of disgruntled investors” (as Harkey calls us) who had the courage and stamina to stand up to Harkey.

Do you have a list of the investors he ripped off? I’m wondering if his wife’s former Chief of Staff, Bill Brough, might be among them. His house is being foreclosed; I’m wondering if he was drawn into the same trap as the others.

Given that he’s running for Assembly, he really should have some comment on his former boss and her husband and business partner (on whose ill-gotten gains she’s been floating her political career.) But I don’t think that he’s answer my questions — anyone else want to try? In his situation, he should be sympathetic to other homeowners who’ve been burned — but that doesn’t mean that he is.

IGNORANCE or APATHY ?
Thanks to Vern’s article, some people might learn about DAN and DIANE HARKEY, about finances and politics in OC.
At the resent Tea Party meeting 8/14/14, speaker Shawn Steel (husband of BOE Michelle) proudly and cheerfully talked about OC women successfully running to be elected, including Diane Harkey (for BOE)…
Gentleman with DAILY PILOT name tag admitted that he did not know who the Harkeys were…..!